COMMISSIONER OF INCOME TAX Vs. THEATRE SRI RANGARAJA

JUDGEMENT

(1.) THE assessment year is 1976-77. THE following question has been referred to us for consideration at the instance of the Revenue:

(2.) THEATRE Sri Rangaraja, Palani, was originally owned by a firm consisting of twelve partners, of which Sourirajulu was one. On March 30, 1971, there was a reconstitution of the firm and the number of partners continuing were only two out of the original twelve. One of the continuing partners retired on October 1, 1972, leaving Sourirajulu to continue the business on his own. While so retiring, the other retiring partner received from Sourirajulu a sum of Rs. 1 lakh. Subsequently, Sourirajulu entered into a partnership with two of his adult sons on April 1, 1973, and that firm of Sourirajulu and Sons sold the theatre and derived a capital gain from that sale.